As we discussed Saturday night -- or was it early Sunday morning? -- the Detroit Lions deserve to get big-boy treatment and analysis moving forward. First up: what appears to be a sizable conundrum on the financial future of All-Pro wide receiver Calvin Johnson.

The Lions have a big decision to make financially when it comes to receiver Calvin Johnson.(Matthew Emmons/US Presswire)

We noted earlier Monday that Johnson finished the season in historic fashion and might be in line for the most lucrative contract extension for a receiver in NFL history. After doing some digging Monday, it appears the NFL's salary-cap rules will leave the Lions with several options -- all of which would require mind-boggling numbers and difficult decisions.

The bottom line: The Lions could be forced to pay Johnson $77 million over the next three seasons alone. That number would cripple the cap structure of many teams, let alone one with as many high draft choices as the Lions have. Here's why and how that would happen:

Johnson's salary cap number is projected to be around $22 million in 2012, thanks to a $14 million base salary, a $4.5 million roster bonus and a debit for the $4.5 million performance bonus he earned in 2011. (I know those numbers don't add up. The debit is part of a bigger cap reconciliation process that hasn't happened yet.)

Obviously, the Lions would like to lower that cap number and could do so with a long-term extension that would spread out the hit over multiple years. But that's where Johnson's unique situation gets tricky. It would be a rare occasion where the NFL's franchise tag rules would work in favor, rather than against, the player.

As you know, the alternative to a long-term contract for a star player is to work under a series of yearly franchise tags. In most cases, the team has the advantage because it doesn't have to guarantee money beyond the current season. But in Johnson's case, it would require monstrous single-season salaries that would actually make the Lions' cap situation worse.

Under the NFL's new collective bargaining agreement (CBA), the franchise tag figure for a player is determined by the higher of the following two values:

1.The average of the five highest salary cap figures at the player's position over the past five years

2.A figure equal to 120 percent of his prior year's cap number.

Johnson's $22 million cap figure for 2012 is much higher than the projected franchise tag number for receivers. So the alternative to signing Johnson to a long-term deal would be letting him play out the final year of his current contract in 2012 and then franchising him at $26.4 million in 2013. Without a deal at that point, Johnson's franchise tag would rise to $31.7 million for 2014 and would account for perhaps 25 percent of the Lions' total cap structure.

That nuance shifts extraordinary leverage to Johnson in any negotiations that might occur over the next few months. If he does absolutely nothing, the Lions would be required to pay him about $77 million -- and substantially limit their cap flexibility -- to keep him on their roster for the next three seasons.

Often, the average of a series of franchise tags provides a rough starting point for negotiations on long-term deals for star players. The three-year average of $25.6 million in Johnson's case is monstrous. Johnson would have to make a concession for getting more money guaranteed up front than he would in the franchise scenario, but keep in mind that the highest average salary for an NFL receiver is currently about 45 percent lower than that: $15 million for Larry Fitzgerald of the Arizona Cardinals, who signed an eight-year deal last summer that included $50 million in guarantees.

What does all of this mean? No matter which way they turn, the Lions will be on the hook for a ceiling-crushing commitment to Johnson. Unless he makes a cash concession to lessen the cap hit, the Lions are in a really, really tough spot.

Obviously it's not an option to let Calvin go. The Lions have to find a way to keep him. Furthermore, I doubt that we'd ever get anything close to fair value in any kind of trade (even if Mayhew could fleece Jerry Jones again) because that team would face cap issues as well. Regardless, I don't want to trade CJ.

The real issue is that we need to secure Cliff Avrill AND Stephen Tulloch this off season and CJ no later than next year. I suspect that it may be easier to work a new long term deal now rather than waiting to the end of next season. That's as much a question as it is a statement. Sly, can you please shed some light on this?

Additionally, even if the Lions did lock up those three, (not to mention the Backus situation) then what can be done in terms of additional free agent acquisitions to improve the team? We clearly need upgrades to our defensive backfield and our O-line. I don't know who else is a free agent this year who we might want to retain but the current roster, albeit improved over the last few years, still has holes.

Note to Sly: If you want to re-title and / or merge this into a broader 'salary cap / free agent' thread, be my guest. I'm fine with that.

I thought the article was fairly badly flawed in one respect: Seifert's insistence that the cost of multiple franchise tags represents the starting point for negotiations. If the cost of multiple franchise tags is considerably higher than what the market (ie any other team) will pay, then there's no way that's the starting point for negotiations. Whilst not being able to use the franchise tag gives Johnson more leverage than usual, the idea it gives him extraordinary leverage is frankly a bit far fetched (just part of Seifert's Lions hate, IMO).

I'm sure a deal for Calvin can be worked out in this off season - even making him the NFL's highest paid player (by yearly average) with a 5yr, $100m contract would potentially free up money in next season's cap - and would be nowhere near the silly figures bandied around by Seifert.

How long is Stafford signed for?

January 10th, 2012, 9:09 am

thelomasbrowns

Player of the Year - Offense

Joined: August 24th, 2010, 9:54 pmPosts: 2861

Re: Digging deeper into Calvin Johnson's future

I'm totally cool with giving him an AP-style 10 year deal or whatever he got. You got Staff and CJ on you're team and you're always going to be a contender.

_________________"Good teams don't worry about a whole lot of stuff. They travel, they play, they win. And it doesn't matter where they go, what the time block is, all those kinds of things. They never seem to bother teams that play well, and we want to be one of those teams." -Jim Caldwell

I'm totally cool with giving him an AP-style 10 year deal or whatever he got. You got Staff and CJ on you're team and you're always going to be a contender.

Exactly, getting rid of CJ would be foolish.

_________________

Follow me on Twitter: @W2G4U

January 10th, 2012, 12:22 pm

LioneeR

Bubbles the Lion

Joined: January 2nd, 2011, 8:12 pmPosts: 57

Re: Digging deeper into Calvin Johnson's future

It is all up to Calvin. A year or so ago I heard that Calvin wasn't very happy in Detroit. Hopefully the Lions winning more games has changed his mind(if the reports were even correct) and he wants to stay here long term. If he does than there is no reason he wouldn't take something similar to Fitzgerald's 8 year 120 million contract with an extra 1 million or so a year. Fitz's deal had 50 million in guarentees. While he could probably get a little more on the open market, I think he would take the added security if he indeed wanted to stay a lion.

January 10th, 2012, 12:47 pm

thelomasbrowns

Player of the Year - Offense

Joined: August 24th, 2010, 9:54 pmPosts: 2861

Re: Digging deeper into Calvin Johnson's future

LioneeR wrote:

It is all up to Calvin. A year or so ago I heard that Calvin wasn't very happy in Detroit. Hopefully the Lions winning more games has changed his mind(if the reports were even correct) and he wants to stay here long term. If he does than there is no reason he wouldn't take something similar to Fitzgerald's 8 year 120 million contract with an extra 1 million or so a year. Fitz's deal had 50 million in guarentees. While he could probably get a little more on the open market, I think he would take the added security if he indeed wanted to stay a lion.

Also remember that was before the emergence of Staff.

_________________"Good teams don't worry about a whole lot of stuff. They travel, they play, they win. And it doesn't matter where they go, what the time block is, all those kinds of things. They never seem to bother teams that play well, and we want to be one of those teams." -Jim Caldwell

It is all up to Calvin. A year or so ago I heard that Calvin wasn't very happy in Detroit. Hopefully the Lions winning more games has changed his mind(if the reports were even correct) and he wants to stay here long term. If he does than there is no reason he wouldn't take something similar to Fitzgerald's 8 year 120 million contract with an extra 1 million or so a year. Fitz's deal had 50 million in guarentees. While he could probably get a little more on the open market, I think he would take the added security if he indeed wanted to stay a lion.

Also remember that was before the emergence of Staff.

I don't think he wants to leave anymore, Stafford and him are getting along great.

_________________

Follow me on Twitter: @W2G4U

January 10th, 2012, 1:02 pm

Ferris

Pro Bowl Player

Joined: April 19th, 2005, 2:10 pmPosts: 2478Location: Michigan

Re: Digging deeper into Calvin Johnson's future

7 year 150 million. 80 million guarenteed.

base salaries start at 1mill, 3mill, 5mill, 7mill, 9mill, 11mill, 14mill with the last 20 million tied into yearly incentives.

something along that lines would pay Johnson 81million the first year, (which would mean money isn't really an issue for the rest of his life) and count 12mill against the cap year 1, 14mil year 2 etc.

I think it's a contract he's played for. Stafford deserve's one too when his time come's. It's really not a conundrum, they just need to mortgage their future on the player's who are worth doing so for. IMO

I'm going to attempt to answer these questions as best as I can. Unfortunately, I don't have access to as much info as I used to and I do not know if the new CBA has changed the accounting rules for NLTBEs. Regardless, CJ's contract is a mess and was designed to be terminated or renegotiated in the final year.

As for the actual numbers from his original contract, his base salary will be $14M this season and $1.6M from his $8M salary advance in 2008 will count against the cap for a total charge of $15.6M. Now this is where it gets tricky. He was paid an option bonus of $4M in 2009 and another one worth $6M in 2010. This would add another $3M to his 2012 cap charge, but the Lions did some simple restructuring each year, but I don't know the exact amounts. This would put his cap charge between $15.6M and $18.6M, but since the Free Press is reporting $17.7M, I'll go with that.

Kevin Seifert made a few mistakes in his article though. CJ does not have a $4.5M roster bonus or any roster bonus for that matter. He probably meant to say prorated signing bonus allocation which would be $4.6M at most, but as I explained above, it is less than that. Using the Free Press numbers, it would be $3.7M.

This brings me to CJ's $4.5M NLTBE bonus. Under the previous CBA, this did not count toward a player's individual cap charge. It was treated as a negative adjustment to a team's total salary cap. This means that if the salary cap is $120M per team, the Lions would only have $115.5M available after the adjustment was made. I do not know if this has changed under the new agreement, but I kinda doubt it.

In essence, what I'm saying is that the franchise tag number for CJ would be 120% of $17.7M or $21.24M instead of the $26.4M that Seifert is reporting. It would also reduce his 2014 franchise tag number to $25.488M for a grand total of $64.428M over 3 years instead of $77M.

That's still a huge chuck of change, but I'm 99.99% positive that the Lions will extend CJ before free agency begins in mid March. His agent will surely use the $64.4M number as a baseline like all agents do, but Mayhew will laugh at him in response like all GMs do in the same circumstance. In the end, CJ will become the highest paid WR in NFL history, but it will significantly reduce his cap charge for next season, allowing the Lions to re-sign some of their own free agents like Avril and Tulloch.

As for the cap itself, I'm hearing that it will stay the same or increase by no more than $5M. I've also heard that the Lions are already $5M above the cap, but I don't think that's accurate. Regardless, the Lions are going to have to make some tough choices this offseason.

_________________

January 10th, 2012, 5:50 pm

LioneeR

Bubbles the Lion

Joined: January 2nd, 2011, 8:12 pmPosts: 57

Re: Digging deeper into Calvin Johnson's future

Sly, when the new CBA first came out, you mentioned something about some lee-way each team could receive in the first or 2nd year(of the new CBA). I can't remember what you called it, but do you know if the Lions used up any exceptions last year, or are some still available to them?

Your knowledge of the CBA/cap space is pretty amazing. Is there a website you normally reference for this information? All of this is very interesting to me.

I'm sorry Wags; I didn't even look in Killers Korner for this so I never saw it.

slybri19 wrote:

I'm going to attempt to answer these questions as best as I can. Unfortunately, I don't have access to as much info as I used to and I do not know if the new CBA has changed the accounting rules for NLTBEs. Regardless, CJ's contract is a mess and was designed to be terminated or renegotiated in the final year.

As for the actual numbers from his original contract, his base salary will be $14M this season and $1.6M from his $8M salary advance in 2008 will count against the cap for a total charge of $15.6M. Now this is where it gets tricky. He was paid an option bonus of $4M in 2009 and another one worth $6M in 2010. This would add another $3M to his 2012 cap charge, but the Lions did some simple restructuring each year, but I don't know the exact amounts. This would put his cap charge between $15.6M and $18.6M, but since the Free Press is reporting $17.7M, I'll go with that.

Kevin Seifert made a few mistakes in his article though. CJ does not have a $4.5M roster bonus or any roster bonus for that matter. He probably meant to say prorated signing bonus allocation which would be $4.6M at most, but as I explained above, it is less than that. Using the Free Press numbers, it would be $3.7M.

This brings me to CJ's $4.5M NLTBE bonus. Under the previous CBA, this did not count toward a player's individual cap charge. It was treated as a negative adjustment to a team's total salary cap. This means that if the salary cap is $120M per team, the Lions would only have $115.5M available after the adjustment was made. I do not know if this has changed under the new agreement, but I kinda doubt it.

In essence, what I'm saying is that the franchise tag number for CJ would be 120% of $17.7M or $21.24M instead of the $26.4M that Seifert is reporting. It would also reduce his 2014 franchise tag number to $25.488M for a grand total of $64.428M over 3 years instead of $77M.

That's still a huge chuck of change, but I'm 99.99% positive that the Lions will extend CJ before free agency begins in mid March. His agent will surely use the $64.4M number as a baseline like all agents do, but Mayhew will laugh at him in response like all GMs do in the same circumstance. In the end, CJ will become the highest paid WR in NFL history, but it will significantly reduce his cap charge for next season, allowing the Lions to re-sign some of their own free agents like Avril and Tulloch.

As for the cap itself, I'm hearing that it will stay the same or increase by no more than $5M. I've also heard that the Lions are already $5M above the cap, but I don't think that's accurate. Regardless, the Lions are going to have to make some tough choices this offseason.

Thanks for all that Sly!

So if I understand this:

1) It's likely that Mayhew / Lewand will try to restructure CJ's deal this off season instead of waiting. And,

2) That's probably best for both sides. But,

3) It's unlikely that the Lions will have the cap space to rework CJ's deal and still retain BOTH Avril & Tulloch. Therefore,

4) We're not likely to see any meaningful upgrades in talent unless it comes via the draft.